“Most valuable asset” means different things to different people. Pause a little, and think what yours would be. Your house, family, or health? Well, there is only one thing common to all of these options – you. You are your most valuable asset, alongside your financial capability to cater to other aspects of your life.
So, what happens if anything happens that prevents you from working, like sickness or disability? Before you say this cannot happen. According to the 2017 Canadian Survey on Disability, there are over 6 million people aged 15 and older identified as disabled. Although the expected actual numbers would most likely be higher, this translates to 22% of the entire population at that time.
Such a large number of people cannot support themselves and their families financially because they cannot work. It doesn’t matter how confident you are about your financial security; meeting financial obligations becomes a myth once you cannot earn your expected income.
What is the way forward?
While no one expects to lose their ability to make money, Ottawa Certified Financial Planners advise it is best to be adequately prepared for such situations.
Savings is the first thing that comes to mind in such instances. But this is hardly the most practical fix. For example, it will take you just six months to exhaust your 10-year savings if you save 5% of your income every year.
You may want to argue that loans can save the day. But that’s hardly true. Banks are not always open to lending to someone who has no means of paying back.
Yes, your spouse can keep things running, right? But the chances of surviving financially and paying bills on one income are slim. In a few cases where it works, you are forced to give up your family’s living standards.
Disposal of Assets
If you consider selling your assets to raise cash, dead the idea. The odds are rarely in favor of anyone looking to dispose of valuables in an emergency. Getting fair market prices becomes difficult. What about taxes and investment risk? These are the issues!
The Ultimate Solution
Fortunately, there is a good way out of this. If you ever lose your ability to earn and meet your financial obligations, your disability plan can save the day…or the entire situation. Individual disability insurance policies offer disability coverage for different scenarios while being flexible for your circumstances.
With a disability insurance policy, you are irreplaceable but your income can be. Consult your Ottawa CFP today to get started.